It’s equal pay day season … and that’s a problem
Last week on Equal Pay Day, Megan Rapinoe spoke powerfully at the White House and at a hearing of the House Committee on Oversight and Reform about the disrespect she has faced in her career because of pay discrimination. Her testimony made tangible the reality that millions of women face in the workplace. Indeed, both Democrats and Republicans agree unfair pay is unacceptable and have offered competing bills in the form of the Paycheck Fairness Act and the Wage Equity Act to close the gender pay gap.
This is a critical conversation and it needs to be expanded beyond the lens of gender. Equal Pay Day (March 24) — the symbolic day on which the average woman finally earns as much as the average man for the previous year’s work — is in reality, Equal Pay season. It began in February for Asian women (Feb. 23) and will stretch into the summer and fall for Black women (Aug. 3), Native American women (Sept. 8), and Latino women (Oct. 21).
The very existence of multiple Equal Pay days underscores that pay equity isn’t just a gender issue — it’s a race and ethnicity issue, too. Unfair pay for employees doing substantially similar work — regardless of gender — is an often overlooked but significant contributor to the widening racial wealth gap in the U.S. And with the disproportionate health and economic impacts of COVID-19 on people of color, it’s more critical than ever to tackle the widening pay gap and opportunity gap for Black, Indigenous, People of Color in the U.S.
While unequal pay has historically perpetuated the widening wealth gap in the U.S., there is a tangible course of action to reverse course: fair pay. Focusing on pay equity is a powerful lever for policymakers and business leaders alike to undo generations of economic damage and create fair workplaces that benefit all employees.
Advancing racial equity requires fair pay
Systemic racism in the workplace has created devastating pay inequities. People of color have unequal access to opportunity for high-paying work and get paid less than their peers doing similar work. While all states have some form of pay equity law covering gender, and most have pay equity laws covering race, the laws are flawed.
America’s pay gaps speak for themselves: the pay gap between Black and white earnings is the same today as it was in the 1950s. And the Hispanic-white pay gap has been steady since 1979. Over time, differences in wealth accumulate and exacerbate the divide: white families in the U.S. have a median net worth of $171,000 compared to $20,720 for Hispanic families and $17,150 for Black families.
Several factors contribute to pay inequity, including companies undervaluing employees of color, companies using salary history to determine starting pay, and bias impacting decisions about pay raises. Research shows, for example, that women of color are 19 percent less likely than white men to get a raise when they ask for one, and men of color are 25 percent less likely.
Pay equity laws are failing us
Since the federal Equal Pay Act of 1963 was signed into legislation, 44 states have enacted pay equity laws, which in general have been written to incorporate more modern thinking and best practices. But these laws are failing both employees and employers, and worse, continuing to foster economic injustices.
Current laws put the responsibility on the employee — not the organization — to find, resolve, and prove disparities in pay. While websites such as Glassdoor provide insights on salaries, these sites still have information gaps that need to be addressed prior to engaging in salary negotiations. Ramifications for non-compliance are few and far between. Even the most well-intended laws put undue burdens on employers, sometimes stymying their ability to make progress on pay equity.
With a new administration and Democratic Congress, new federal pay equity laws are inevitable, but there need to be some significant changes to what has been tried in the past. Laws requiring employers to assess pay equity is step one — but we’re not going to see real change until employers (and employees) realize that the foundation of a diverse and inclusive workplace is ensuring every employee is valued for their contribution without regard to gender or race. Pay equity is table stakes and no organization truly values its people without it. Legislators must do better to work with business leaders to identify common sense ways to collect employee data without imposing unnecessary hurdles.
Pay inequity has lived in the shadows for too long, undermining the good work being done to create a more equitable society. It doesn’t have to be that way. Pay equity can be a strength that advances fairness in the workplace and beyond. It is also a way for employers to attract and retain the best talent, offering companies a competitive advantage. The good news is there are many ways today to identify and fix pay inequities, with technology making it a faster, more easily replicable process.
As pay equity again comes to the forefront and we work to turn the tide on the inequities that have been further exacerbated by the pandemic, we’re at a vital moment to get pay equity right. And for the first time ever, the country has the tools and the experience to lead the world in achieving it.